Shanta Gold Limited, the East Africa-focused gold producer, developer and explorer, has provided an update on its plans to finance the Singida Gold Mining Project in the Singida Region that lies in central Tanzania.
The company is to float its Singida gold mining asset in Tanzania on the Dar es Salaam Stock Exchange (DSE). The gold miner wants to raise Tshs.46 billion ($20 million) to develop the Singida gold mine, with the Initial Public Offering (IPO) expected to take between 6-12 months. The funds will be used for key infrastructure requirements in place including water, grid power, resettlement and an operating camp.
Shanta Gold will retain at least 51% ownership of Singida and will operate the project with the money to be used to start production and for exploration to expand the resource.
An internal study at the end of last year estimated gold production of 28,000 ounces per year for six years at an upfront cost of Tshs.43.7 billion ($19 million). Cash costs were projected at Ths.1.8 million ($794) per ounce.
Eric Zurrin, the chief executive of Shanta Gold, said using asset-level financing unlocks value for Shanta Gold shareholders while also allowing it to retain a controlling interest. He added that he had been encouraged by the initial feedback from institutional investors across East Africa who are seeking US dollar linked investments in support of industrialization. The IPO will also offer Tanzanians a rare investment opportunity within their own mining sector.
Besides the Singida gold mine, Shanta Gold owns the New Luika Gold Mine located in the Lupa Gold Field in Mbeya Region, south west of Tanzania. The mine started gold extraction in 2012, producing 81,873 ounces of gold in 2015.
Gold reserves in Tanzania are estimated at about 45 million ounces with gold exploration centered mostly on the greenstone belts around Lake Victoria. Gold production in Tanzania stands at around 50 tonnes per year which makes it the 4th largest gold producer in Africa after South Africa, Ghana and Mali.